Business groups say increased minimum wage and national insurance contributions are pushing inexperienced workers to back of recruitment queue.
British companies are struggling to hire young people as rising labour costs squeeze profit margins and derail recruitment plans, business leaders told MPs. Employers are avoiding the perceived risk of hiring less-experienced workers amid mounting cost pressures. The trend has pushed young job seekers to the back of the recruitment queue.
Government increases to minimum wage and employer national insurance contributions have significantly raised hiring costs for businesses. These policy changes come after a prolonged period of cost inflation that has already pressured company margins. The cumulative effect is making employers more selective about recruitment decisions.
Business lobby groups testified before MPs that the additional costs are particularly affecting entry-level positions typically filled by younger workers. Companies are prioritizing experienced candidates who require less training and pose lower perceived risks. The exact scale of the impact on youth employment rates was not specified in the testimony.
The situation creates a challenging cycle where young people struggle to gain initial work experience needed for future employment. This could have long-term implications for skills development and career progression among younger demographics. Business groups are calling for policy adjustments to address the hiring disincentives.